Arrow electronics to buy eInfochips for over Rs 1,500 crore

AHMEDABAD : Arrow Electronics, a US-based Fortune 500 company, is acquiring eInfochips, a product engineering and software R&D services company, for more than Rs 1,500 crore, people privy to the development told ET.

As a part of the payout, 350 employees of Ahmedabad and California-based eInfochips may get Rs 1 crore each for their ESOP holding, they said. The deal size may be in the range of Rs 1,500-1,800 crore, they said.

Sources from Ahmedabad-based venture fund GVFL, which holds around 5% equity stake in eInfochips, confirmed that a deal has been stuck, but added that up till now no official communication has been send to GVFL by the company. “I cannot comment on this right now,” Pratul Shroff, founder of eInfochips, told ET in response to an email seeking comment.

Arrow Electronics did not respond to ET’s email as of press time Friday.

According to sources, on Thursday evening the management of eInfochips had held a closed-door meeting with senior employees to explain and share ESOP related valuations. The meeting was held at the outskirt of Ahmedabad city at a golf club – Kensville Golf & Country Club.

As per the sources the employees were also made to sign confidentiality agreement to maintain the secrecy for a while. The US Company is New York Stock Exchange listed company with annual turnover of over $24 billion. As per an estimated eInfochips annual turnover may be around Rs 500 crore.

“The deal seems fantastic New Year gift for the ESOP holding employees,” said Bhavin Bhagat, founder of Indiabizforsale.com. Such kind of M&As that make employees ‘crorepati’ overnight are not very common in Indian M&A space,” he said.

Thanks to ESOP payouts, most employees are happy that the company is being sold, an employee of eInfochips said. “For most of us, this is the best Santa gift ever,” he told ET on condition of anonymity.